16.	Operating and Reporting Segments

Our operating segments are components of our business for which discrete financial information is available and reviewed regularly by the chief operating decision maker, our Chief Executive Officer, to evaluate performance and make operating decisions. Based on this criteria, each of our communities qualifies as an operating segment, and therefore, it is impractical to provide segment disclosures for this many segments. As such, we have aggregated the homebuilding operating segments into

six

reportable segments.

Our homebuilding operating segments are aggregated into reportable segments based primarily upon geographic proximity, similar regulatory environments, land acquisition characteristics and similar methods used to construct and sell homes. Our reportable segments consist of the following

six

homebuilding segments and a financial services segment noted below.

Homebuilding:

	( 1 )	Northeast (New Jersey and Pennsylvania)
	( 2 )	Mid-Atlantic (Delaware, Maryland, Virginia, Washington D.C. and West Virginia)
	( 3 )	Midwest (Illinois and Ohio)
	( 4 )	Southeast (Florida, Georgia and South Carolina)
	( 5 )	Southwest (Arizona and Texas)
	( 6 )	West (California)

Financial Services

Operations of the Company’s Homebuilding segments primarily include the sale and construction of single-family attached and detached homes, attached townhomes and condominiums, urban infill and active lifestyle homes in planned residential developments. In addition, from time to time, operations of the homebuilding segments include sales of land. Operations of the Company’s Financial Services segment include mortgage banking and title services provided to the homebuilding operations’ customers. We do

not

typically retain or service mortgages that we originate but rather sell the mortgages and related servicing rights to investors.

Corporate and unallocated primarily represents operations at our headquarters in New Jersey. This includes our executive offices, information services, human resources, corporate accounting, training, treasury, process redesign, internal audit, construction services, and administration of insurance, quality and safety. It also includes interest income and interest expense resulting from interest incurred that cannot be capitalized in inventory in the Homebuilding segments, as well as the gains or losses on extinguishment of debt from any debt repurchases or exchanges.

Evaluation of segment performance is based primarily on operating earnings from continuing operations before provision for income taxes (“Income (loss) before income taxes”). Income (loss) before income taxes for the Homebuilding segments consist of revenues generated from the sales of homes and land, income (loss) from unconsolidated entities, management fees and other income, less the cost of homes and land sold, selling, general and administrative expenses and interest expense. Income (loss) before income taxes for the Financial Services segment consist of revenues generated from mortgage financing, title insurance and closing services, less the cost of such services and selling, general and administrative expenses incurred by the Financial Services segment.

Operational results of each segment are

not

necessarily indicative of the results that would have occurred had the segment been an independent stand-alone entity during the periods presented.

Financial information relating to the Company’s segment operations was as follows:

	Three Months Ended April 30,						Six Months Ended April 30,
(In thousands)	2018			2017			2018			2017

Revenues:
Northeast	$	43,771		$	45,950		$	63,970		$	104,525
Mid-Atlantic		104,160			100,600			175,457			200,826
Midwest		42,938			42,019			83,517			85,721
Southeast		60,901			56,635			117,569			113,219
Southwest		159,147			225,255			287,452			408,664
West		78,098			100,843			163,148			197,374
Total homebuilding		489,015			571,302			891,113			1,110,329
Financial services		13,054			14,494			23,942			27,343
Corporate and unallocated (1)		475			139			4,655			272
Total revenues	$	502,544		$	585,935		$	919,710		$	1,137,944

Income (loss) before income taxes:
Northeast	$	5,960		$	(2,722	)	$	(3,741	)	$	(1,816	)
Mid-Atlantic		6,700			918			8,652			4,800
Midwest		(1,110	)		(3,170	)		(3,454	)		(2,458	)
Southeast		(5,286	)		428			(6,947	)		134
Southwest		10,047			19,785			15,558			31,708
West		7,172			2,317			15,239			1,563
Homebuilding income before income taxes		23,483			17,556			25,307			33,931
Financial services		4,256			7,134			6,803			13,128
Corporate and unallocated (1)		(37,317	)		(32,389	)		(72,159	)		(54,435	)
Loss before income taxes	$	(9,578	)	$	(7,699	)	$	(40,049	)	$	(7,376	)

(

) Corporate and unallocated for the

three

months ended

April 30, 2018

included corporate general and administrative costs of

$16.2

million, interest expense of

$19.9

million (a component of Other interest on our Condensed Consolidated Statements of Operations), loss on extinguishment of debt of

$1.4

million and $(

0.1

) million of other income and expenses primarily related to interest income and gain on the sale of our corporate headquarters building. Corporate and unallocated for the

six

months ended

April 30, 2018

included corporate general and administrative costs of

$35.3

million, interest expense of

$39.5

million (a component of Other interest on our Condensed Consolidated Statements of Operations), loss on extinguishment of debt of

$1.4

million and $(

4.0

) million of other income and expenses primarily related to interest income and gain on the sale of our corporate headquarters building. Corporate and unallocated for the

three

months ended

April 30, 2017

included corporate general and administrative costs of

$16.1

million, interest expense of

$16.0

million (a component of Other interest on our Condensed Consolidated Statements of Operations), loss on extinguishment of debt of

$0.2

million and

$0.1

million of other income and expenses primarily related to rental income. Corporate and unallocated for the

six

months ended

April 30, 2017

included corporate general and administrative costs of

$31.7

million, interest expense of

$29.3

million (a component of Other interest on our Condensed Consolidated Statements of Operations), gain on extinguishment of debt of

$7.4

million and

$0.8

million of other income and expenses primarily related to bond amortization and rental income.

(In thousands)	April 30, 2018		October 31, 2017

Assets:
Northeast	$	168,640	$	180,545
Mid-Atlantic		210,238		224,398
Midwest		83,412		84,960
Southeast		244,337		231,644
Southwest		328,521		294,337
West		189,806		175,347
Total homebuilding		1,224,954		1,191,231
Financial services		120,689		162,113
Corporate and unallocated		296,848		547,554
Total assets	$	1,642,491	$	1,900,898